Administered Pricing

Discipline: Economics

Administered Pricing, also referred to as rigid pricing, or inflexible pricing, refers to the setting of prices by a public or private entity, and not by market forces.

Monopolies, cartels, oligopolies or regulated economies are all examples of market structures in which certain entities in the market determine the market price.

The fixed exchange-rate system, in which member countries establish fixed values for the exchange rates of their currencies, is also an example of administered pricing.

Some economists argue that administered pricing causes cost-push inflation.

Also see: average cost pricing, marginal cost pricing, mark-up pricing, rate of return pricing, target return pricing


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